THE WAGES OF DESTRUCTION: The Making and Breaking of the Nazi Economy
by Adam Tooze
Allen Lane £30, 832 pages
Pile up the mass of scholarship published about Nazi Germany since the second world war and you will probably end up with a stack several times the size of the Zugspitze. Is there anything at all we do not know yet about this dramatic era?
Yes, answers Adam Tooze in The Wages of Destruction, a masterful economic history of the Third Reich. Tooze, an economic historian at Cambridge, has added his name to the roll call of top-class scholars of Nazism. His painstakingly researched, astonishingly erudite study not only uncovers new explanatory strands for the events that led to and ended the war, but smashes a gallery of preconceptions on the way.
Based on solid statistical foundations, his central and perhaps most counter-intuitive finding is that the Germany that went to war in 1939, steeled by six years of hectic rearmament, was no mighty industrial steamroller but a weak economy, starved of resources and foreign exchange and crippled by an over-sized and utterly unproductive agricultural sector. Despite rapid industrialization in the late-19th century, standards of living in 1938 Germany were only half those in the US and two-thirds of the UK's.
Far from the juggernaut that lives on in popular imagery, Adolf Hitler's country from the mid-1930s onwards was teetering on the brink of collapse. By 1940-41 it had reached crisis, failing to commandeer the steel and fuel to reverse the unfavorable and fast-degrading balance of power between its underfunded military and that of the Allied powers. For most of the period covered, from Hitler's rise to power in 1933 to the regime's downfall in 1945, Germany's economic policy boiled down to scarcity management. It was this, Tooze contends, that dictated the Blitzkrieg nature of the 1940 offensive against the west. The state of Germany's limited stocks of oil, coal, steel, manpower, ammunition, vehicles and weapons created bottlenecks so it could not win a war of attrition against its better equipped opponents. Once forced into a defensive position after the attack on Russia ground to a halt in the winter of 1941, the war was lost.
If the economic managers of the Third Reich had any success at all, it was in ensuring that the conflict lasted four more years. This came at extraordinary human and moral costs. Occupied territories, mainly in the east, were ruthlessly looted for raw material, food and workforce - as the war effort climaxed, Germany had as many foreign workers on its soil as it does now. Civilians and prisoners of war were worked to death as Wehrmacht, Luftwaffe and Kriegsmarine descended into competition for resources.
Tooze is no economic determinist. It is to his credit that he does not dismiss politics as a factor in his narrative. The "ignorant condescension", mainly racially motivated, shown by the Germans towards Soviet Russia was, he says, among the regime's most determining miscalculations as it embarked on its eastern offensive. What it found was no primitive Slavic society, but "the first and most dramatic example of a successful developmental dictatorship".
Tooze also refreshes our understanding of the Anglo-American bombing campaign of 1942-45. The raids on the Ruhr region, he argues, dealt a mortal blow to Germany's military-industrial complex. But the RAF's futile attempts at repeating in Berlin the firestorm it had sparked in Hamburg in July 1943, instead of tightening the hold on the coal-and-steel choke-point of the Ruhr, was "a tragic operational error" that may have put off victory for a year.
One of Tooze's most fascinating conclusions is how much Hitler's economic understanding was informed by the US. Roosevelt's America was not only the ultimate enemy, dominated as the Nazis thought by Jewish capitalism, but a role model. More than France's and Britain's colonies, it was America's vast territory and internal market that informed and, in his eyes, legitimized Hitler's view that Germany could only prosper through the colonization of the east.
This Lebensraum theory, whereby local populations would be driven away or eradicated as the American Indians had been, was the Nazi answer to America's frontier mentality. In fact, many aspects of Hitler's economic thinking were nothing but a distorted interpretation of the US economic model. Even the dictator's irrational belief in the "power of the will" over adversity echoed the proverbial American optimism.
In 1945 John Kenneth Galbraith saw the defeat of the Third Reich as the "conclusive testimony to the inherent inefficiencies of dictatorship and the inherent efficiencies of freedom". In truth, the collapse had more to do with Germany's pre-war weaknesses and the Nazis' failure to reverse them. From 1933, the Nazi economy was a war economy. It had no blueprint for peacetime.
Copyright The Financial Times Limited 2010